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BLOG: Obama-care and Real Estate

The 3.8% real estate tax and who pays it.

As most know by now, the Obama-care legislation not only revolved around healthcare, but it extended into areas of life that we rarely associate with hospitals, doctors offices and pharmacies.

The Obama-care legislation imposes taxes on different areas of life to attempt to cover the massive expenses that will be incurred from this broad sweeping approach to national health care. One of the taxes is a 3.8% tax on home sales. When this was discovered by NAR(National Association of Realtors), the outcry could be heard in Canada. This is outrageous! Why should home sellers be taxed because they are selling their home? Especially with current conditions, a lot of people can't even afford to sell their home without adding a tax to the transaction.

WAIT!!!!

There are rumors flying saying that everyone pays the tax, only the "rich" pay the tax and a multitude of other harebrained ideas of how the tax is applied. The reality is, the tax is only paid on gains from the sale of a home and you have to have maxed out your allowable lifetime gains ($250,000 individual/$500,000 couple) in addition to making a certain income.

While this is still not an ideal situation and no one ever likes to hear the word "tax," it is a very easily understood method to determine if you "qualify" to contribute to the national health care plan. 

This link explains some of the information surrounding this tax.

In addition, if you'd like to know what your home could be worth and what you can expect to collect if you sold your home, visit www.allhomes4me.com or my Facebook page at www.facebook.com/timmontoyarealtor

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Robert McArtor, RE/MAX Components September 10, 2012 at 04:21 PM
Thanks Tim for explaining this to the public. I have also received numerous calls and emails from clients who have discovered this with great fear!
How many times...do I have to buy my home? September 11, 2012 at 06:11 PM
One more example of government over reach. And this is a good thing?
Tim Montoya September 12, 2012 at 01:54 AM
I agree. Never said it was good. Having to pay tax on your own land or on the profit you earn after being a responsible owner and maintain the home and the mortgage is not my idea of fair.
Parissa Snider September 15, 2012 at 09:04 PM
The vast majority of people who sell their homes won't pay a dime. A lot of conditions have to be met. For example, IF my husband and I earn more than $250K per year AND we sell our primary residence for a $500K profit, we STILL would not pay a 3.8% tax on the sale. If we profit $1 more than $500K on the house, we pay 3.8% on the $1 only. The outrage over this is fabricated by misinformation in forwarded junk mail. Sources for these details ( in addition to what the blogger referenced): http://www.factcheck.org/2012/04/realtors-the-3-8-sales-tax-and-247-medicare-premiums/ http://www.realtor.org/small_business_health_coverage.nsf/docfiles/government_affairs_invest_inc_tax_broch.pdf/$FILE/government_affairs_invest_inc_tax_broch.pdf http://www.washingtonpost.com/realestate/health-care-laws-38-percent-surtax-will-not-affect-many-home-sellers/2012/07/12/gJQATidFgW_story.html
Robert McArtor, RE/MAX Components September 16, 2012 at 12:20 AM
If its not such a big deal....then why bury it in a Health Care Bill? Why not be transparent and disclose it out in the open for what it is? Just another tax burden on the home owner.
Tim Montoya September 16, 2012 at 02:53 AM
There's no fabrication or misinformation. The outrage is the way it was hidden in legislation for national health care and the fact that it will be yet another untrackable source of income for the government. There's no accountability for the taxes they collect now and no way of seeing where it is going. I have issues burdening others for ideas the ideas of the few elite leaders. This is not proven and I am willing to bet, that the tax would get increased over time and the guidelines changed so that it will reach to effect more and more.
VolunteerMom2 September 28, 2012 at 03:21 AM
Seriously, real transparent, huh? Bet ya none of you know or have heard that Obama has 1 billion being sent to the Muslim brotherhood so they can buy submarines. (just google it) Hmmm, maybe that's somewhere in the Health Care bill also! Guess who's paying for that? Unbelievable.
1ke September 28, 2012 at 10:14 AM
House. Bank. House. Bank. Two different things. Confuse the two and all hell breaks loose. Remember?

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